Pub group Marston’s (MARS) said it had made an encouraging start after reopening 80% of its estate from 12 April, benefiting from an investment in outdoor spaces and reflecting the high share of its pubs which have outdoor areas.
Despite the positive opening news, the shares dropped 2% to 93.3p after reporting a pre-tax loss of £106 million for the 26 weeks to 3 April, with most of the estate closed during the period.
STRONG APRIL TRADING
In the period from 12 April the company achieved like-for-like revenues at 77% of pre-Covid levels, adjusting for the Easter weekend in 2019, demonstrating pent-up demand.
Wet sales reached 89% of pre-pandemic levels while food lagged at 59% reflecting the cold April weather conditions which were not conducive for outdoor dining.
The business managed to break-even at the EBITDA (earnings before interest, taxes, depreciation, and amortisation) level in April, which bodes well for the future now that indoor spaces are open.
After the planned removal of social distancing from 21 June the company expects to trade at normal levels in the final quarter of its financial year to September.
Leisure analyst at Shore Capital, Greg Johnson, commented: ‘We intend to reintroduce forecasts shortly. Our working assumption would be a recovery in profitability to pre-Covid levels by FY2023, with Marston’s generating EBITDA of £170 million (ex-Beer Co) in the year to September 2019.’
Chief executive Ralph Findlay is scheduled to step down later in the year to hand over to his replacement and current chief financial officer, Andrew Andrea.
Findlay commented: ‘Andrew shares the passion I have for this very special business and brings with him invaluable experience and knowledge of both Marston's and the pub sector, having been instrumental in shaping the Group's strategy to date.’
